Dear Rocky,
You need to spend a lot of time watching the market to get the answers for your
questions. You must pay twice your effort for that.
The total understanding of the market is a HUGE project that I think no beginner can
"learn" all the thing at the same time, so my suggestion for you is that you must learn
them slowly, one by one.
You cannot eat 100 pizzas in one day, but you can eat that amount in one year or a few years if needed.
My answers to your questions: (you need to find them yourself in order to be useful for yourself)
1. Reaction:
What is the reaction of a girl you first meet and you say hello to her? She may smile at
you or she may slap on your face. What is the reaction you want to see?
Now when price go up to a
resistance level, and then Big Trades come in, and what
reaction you can then see? The
Tape/price slow down and pull-back a few
points or the
price just stop for a second and you see on the Tape still many buyers coming in, and
price still continue up? If I want to consider short at this level, sure I want to see
some kind of pull-back to confirm that the market/demand is not too strong to consider
short.
2.
S/R levels:
All Hi,Lo,Close,
Pivots PP R1 S1,etc, and whole numbers like 100, intraday high low etc
are S/R levels. Too many to consider for beginner, so Bloom suggest us at the beginning
only consider previous days' Hi Lo Close.
3. Quality of how orders get filled:
When you watch closely on the ES, sometime you can see a price tick very difficult to
take out... many attempt to "eat" this tick, but just cannot....
But on the other time, you see big limit orders sit on the ask, but just get eat like a
cake....
I don't know how to define "Quality of how orders get filled" but when you watch ES
closely and longer you can just see them.... it is not as easy as saying like 35% or 64%
Quality, but you can have a tell about the different.
4. Who is stronger:
When price go up to a resistance level, speed is slow, orders on the Tape are all small
trades, then at the resistance level, a lot of Big trades show up fast and push price
lower, you tell me who is stronger?
Now, if price go up to the same resistance level, speed is fast, with big trades showing
continuously and never stop, and the price never pull back or stop, you tell me who is
stronger?
The two cases above are extreme case, there are many cases not easy to tell for beginner
like you and me..... the only thing I can do right now is just don't trade and skip this
level... haha but sometime I still overtrade, and "guess" who is stronger! I need to get
rid of those overtrade to become consistent.
5. Simply supply were satisfied:
Don't think it too complicated, the market is a big market. The big trader supply of
10000
contracts for sell, but if there are still over 10000 small retail traders with 1
or 2 contracts need to buy ( maybe they shorts previous days, and today see no hope price will
drop back, so they need to
buy to cover), then the 10000 contracts for sell will be eat up.
6. Remember what price were this seller. It would be support level than he ll begin to go
out of short:
I think Bloom means: It would be support level that he'll begin to get out of his short
positions.
Let say, if you have short at a level with 10000 contracts, then price just go up and
you are now lossing.... what will you do later if price luckily come back to your entry
level? Will you buy to cover your short position?
It is the basic operation of S/R levels.
I am still a learner, so don't just blindly believe what I say, find the answers out
yourself so that you can believe in yourself... it is what you need to trade.
Let me Thanks Bloom again here, for he guide me think more about the detail of the
market. And when you can "see" what is really happening, there is much lesser fear inside my
head.
Best Regards,
Antony Ho.